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Mangtulal Bagaria Vs. Upendra Mohan Pal Chaudhuri - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKolkata
Decided On
Reported inAIR1930Cal335
AppellantMangtulal Bagaria
RespondentUpendra Mohan Pal Chaudhuri
Cases ReferredHill v. Sayer
Excerpt:
- .....estate of rajdeo, several points have been taken. the first point that has been argued is that the mortgage decree passed on consent, in execution of which the plaintiff purchased the property, cannot be considered as a mortgage decree which would entitle the plaintiff to enforce all the rights of a purchaser under a mortgage decree. in other words, the purchase by the plaintiff amounts to a purchase by private treaty. that being so, as the plaintiff, who was the first mortgagee, has purchased the equity of redemption with notice of the lease in favour of rajdeo, the lease is binding upon him and he cannot seek to enforce the mortgage as against rajdeo or his representative, as the mortgage has become extinguished, the two interests having been united in the same person. in support of.....
Judgment:

B.B. Ghose, J.

1. This is an appeal on behalf of the defendant against the decree of the Subordinate Judge, 24 Parganas, dated 12th May 1928. The facts giving rise to the suit, out of which this appeal arises, may be shortly stated thus : One. Ashokenath Mitra mortgaged certain properties to Mrs. Janaki Agnes Penelope Majumdar by an indenture dated 18th August 1916. The mortgage was in the form of an English mortgage. After that date and before 1919, which date would be relevant with regard to the appellant's title, the mortgagor executed several other mortgages with respect to those very properties which were mortgaged to Mrs. Majumdar. The mortgagor, however, was allowed to remain in possession of the mortgaged properties. On 9th August 1918, the plaintiff obtained an assignment from Mrs. Majumdar of her first mortgage. Subsequent to that date, the plaintiff advanced further sums to the mortgagor and took two other mortgages from him. Nothing, however, depends upon that fact. One Nalinimohan Das Gupta obtained an assignment of some of the mesne mortgages from the mortgagees by a document dated 25th January 1920, and he brought a suit on the original side of this Court on his mortgage in 1921. In that suit, all the other mortgagees, including the first mortgagee, were made parties and, by a consent decree, it was directed that all the properties would be sold and the mortgagees paid off out of the sale proceeds. The sums due to each of the mortgagees were mentioned in the consent decree. Directions were given for the sale of the properties by the Registrar, and it was directed that the properties would be sold free from all in cumbrances in favour of the mortgagees, who were parties to the suit. The property, in question, in this suit is No. 10, Elgin Road, and the direction with regard to that property in the consent decree was that the sale proceeds of that property should be first applied in payment of the amount due to the plaintiff under the mortgage of Mrs. Majumdar and certain other directions were given which it is not necessary here to mention.

2. Before that suit was brought, the mortgagor, Ashoke, granted a lease of flats Nos. 4 to 9 in the premises No. 10, Elgin Road, on 3rd April 1919, in favour of a gentleman named Rajdeo at a rent of Rs. 400 per month for 20 years with an option of renewal for 5 years after the expiry of the term. Rajdeo died before the present suit was brought and his interest is represented by the present appellant, who has been appointed administrator of the estate left by him. Defendants 1, 2 and 3 are his heir3. Neither Rajdeo nor any person representing Rajdeo s estate was a party tattle consent decree or in the suit of 1921. This consent decree was dated 6th. March, 1922. In execution of that decree, the property No. 10, Elgin Road, was sold and purchased by the plaintiff. The plaintiff brings this suit with several prayers, the most important of which is that the defendants representing Rajdeo's estate should be required to redeem him with regard to his interest under the assignment of the mortgage of Mrs. Majumdar dated 18th August, 1916 : and, on their failure to do so, the property might be sold free from the lease hold interest. There were certain other prayers which are unnecessary for me now to state, because the decree as made by the Subordinate Judge has not been questioned by any cross-objection on the part of the plaintiff. The defendant, by which expression I mean the representative-in-interest of Rajdeo, raised several questions in defence. The other defendants were the several other mortgagees or their representatives, who have no concern with the matter now in issue. The principal contentions of the parties in the Court below are covered by issues 5 to 8, and the questions raised before us fall within those issues.

3. The Subordinate Judge has made a decree to this effect, that the lease of 3rd April 1919, in favour of Rajdeo is operative against the prior mortgagees as a lease from month to month and that defendants 1 to 3 and defendant 21, who is the appellant before us, have the right to redeem the mortgage of the plaintiff, and they were allowed 30 days for redeeming the plaintiff; in default, the property was to be sold free of the lease and the sale proceeds applied as prayed for by the plaintiff. In appeal on behalf of defendant 21, who, as I have already stated, now represents the estate of Rajdeo, several points have been taken. The first point that has been argued is that the mortgage decree passed on consent, in execution of which the plaintiff purchased the property, cannot be considered as a mortgage decree which would entitle the plaintiff to enforce all the rights of a purchaser under a mortgage decree. In other words, the purchase by the plaintiff amounts to a purchase by private treaty. That being so, as the plaintiff, who was the first mortgagee, has purchased the equity of redemption with notice of the lease in favour of Rajdeo, the lease is binding upon him and he cannot seek to enforce the mortgage as against Rajdeo or his representative, as the mortgage has become extinguished, the two interests having been united in the same person. In support of this contention the learned advocate on behalf of the defendant relies on the case of Smith v. Phillips [1837] 1 Keen 694. In that case, the Master of the Rolls held that the mortgagee, who was the defendant in the case, by becoming the purchaser of the equity of redemption, had united the interests of the equitable mortgage and the equity of redemption and these two interests having been united could not be separated and, therefore, the plaintiff who had an agreement for lease from the mortgagor was entitled to have his equitable charge satisfied out of the united interests which constituted the equity of redemption. In other words, that caso proceeded upon the principle enunciated in Toulmin v. Steere [1817] 3 Mer. 210. It is hardly necessary to point out that the principle laid down in Toulmin v. Steere [1817] 3 Mer. 210 has never been followed in this country and it has been adversely commented on in several cases, even in the House of Lords. Although in the latest case of Whiteley v. Delaney [1914] A.C. 132, the House of Lords refrained from expressing any opinion as to whether Toulmin v. Steere [1817] 3 Mer. 210 was correctly decided, it being unnecessary to do so, as on the facts it was found that there was no merger the observations of Parker, J., as he then was, in the trial Court, reported in Manks v. Whiteley [1911] 2 Ch. 448, are instructive with regard to the question. It is, however, unnecessary to pursue the matter further, as in Gokaldas Gopaldas v. Puranmal Premsukhdas [1884] 10 Cal. 1035, their Lordships of the Judicial Committee observed that the doctrine of Toulmin v. Steere [1817] 3 Mer. 210 is not applicable to Indian transactions, except as the law of justice, equity and good conscience, and their Lordships did not apply the doctrine to that case : see also the cases of Dinobundhu Shaw Chowdhry v. Jogmaya Dasi [1910] 29 Cal. 154 and Mahomed Ibrahim Hossain Khan v. Ambika Pershad Singh [1912] 39 Cal. 527. A mortgage is not necessarily destroyed where the incumbrancer buys the property which is subject to his charge, though he takes no distinct steps to keep it alive. The cases of Liquidation Estates Purchase Co. Ltd. v. Willough by [1898] A.C. 321 and Crosbie-Hill v. Sayer [1908] Ch. 866 may be referred to in support of this proposition. It is not, therefore, a sound proposition that, because the mortgagee, purchased the equity of redemption, it may be by what amounts to a private: treaty, it necessarily causes a merger of the mortgagee's interest. The plaintiff as mortgagee, therefore, is entitled to assert his right as such mortgagee against the defendant and may claim that his mortgage interest has been kept alive notwithstanding his purchase of the equity of redemption, as this was for his benefit : see Section 101, T.P. Act. The only thing that the defendant may say is that he is not bound by any of the terms of the consent decree, that is, as regards the validity of the mortgage or as regards the amount due under the mortgage and so forth. Those 'matters, however, are not in dispute. Not being a party to the suit, his right of redemption is kept alive and the lower Court has made a decree allowing him to redeem the mortgage. The appellant's contention, therefore, that the plaintiff has no right to enforce the mortgage in this suit must fail.

4. The next point urged is that, by reason of the conditions of sale, the plaintiff is bound by the lease. The conditions of sale with regard to this property are set forth in para. 21, Ex. B. The learned Subordinate Judge seems tome to be quite right in his view that the conditions only give notice to any person who would purchase premises No. 10, Elgin Road, about the existence of the tenancy and that it was for a term of 20 years with a further covenant for renewal for five years. The learned advocate for the appellant relies upon the closing sentence of that clause which runs thus (that the purchaser)

shall not be entitled to raise any objection on that score nor will be entitled to ask for vacant possession.

5. It is contended that the person purchasing the property will be bound by the terms of the lease and, as the plaintiff purchased the property, he is bound by all the provisions of the lease. There are two answers to this contention. The first is, as stated by the learned Subordinate Judge, that the purchaser would not be entitled either to repudiate the sale, because he does not get vacant possession, nor would he be entitled to ask for any relief against any party to the suit, for not being able to get vacant possession of the property purchased. The next answer is that the plaintiff, as purchaser of the equity of redemption, may not repudiate the lease create by the mortgagor; but, as the mortgagee's interest in the plaintiff is alive, he may, as such mortgagee, enforce his mortgage, as against the lessee and that is the relief that has been given to him by the lower Court. Nothing can be said against that right of the plaintiff as mortgagee by reason of the conditions of sale.

6. Another point was urged, which does not appear to have been taken in the Court below, either in the written statement or in the issues, that, by asking for rent from the lessee, the mortgagee has affirmed the lease and is, therefore, precluded from repudiating it. This demand is contained in a letter dated 24th November 1925, addressed to the Official Receiver, who was then acting as the manager of the estate left by Bajdeo. A copy of the plaint in this suit was annexed to that letter and the manager was asked to surrender the lease and give possession of the premises and to pay rent to the purchaser from the date of his purchase. It is contended on behalf of the respondents that this letter was addressed with the object of bringing about a compromise. If action had been taken according to that letter, the suit would not have bean brought. It is not a demand for rent acknowledging the validity of the lease. That seems to be so, because, although no rent was paid for more than a year after the purchase of the equity of redemption by the plaintiff, there was no previous demand for rent. But the decree that has been made by the Court below affirms the existence of the lease, although it has been stated that it is operative only as a lease from month to month. The question as regards the nature of the lease would have been material, only if there had been no order for sale of the property in default of redemption but a decree had been made for possession if the defendant failed to redeem.

7. It seems to me that the question as regards the validity of the lease, according to the terms on which it was granted, is only academical, having regard to the form of the decree made by the lower Court. It is, however, necessary to state that the Subordinate Judge is quite fight in his view that the mortgagor had no right to create such a lease as he did in favour of Rajdeo. The Subordinate Judge points out that there was no evidence adduced by the defendant to show that residential houses, or rather flats in Calcutta, are ordinarily let out for such a long time as 20 years with a right of renewal. It seems that this lease was not granted in the usual course of management. Whatever may be the rights of a mortgagor under a simple mortgage to grant leases in the usual course of management, there is considerable difficulty on the part of a mortgagor, who has created an English mortgage, to grant such a lease as this. Such a mortgagor can only act as agent on behalf of the mortgagee, and without the concurrence of the mortgagee such a lease cannot be binding on the mortgagee. But, as I have already stated, there is no decree in ejectment on the ground that the lease is not binding on the mortgagee. There has been a decree for sale of the property on failure of the defendant to redeem and the extent of his interest seems to me to be a purely academical question. On all these grounds, this appeal mustst and dismissed with costs. In assessing the costs, the costs of preparing Exs. 11 and 12 of the respondents' portion of the paper-book must be excluded, as they have already been printed by the plaintiff. The property will be now sold in term3 of the decree of the lower Court. Let the records be sent down without delay.

Panton, J.

8. I agree.


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